144 – Learn When It’s Time To Leave Your Business – Paul McManus

Today’s guest is Paul McManus, Paul started his career working in his family’s office supply store that was in existence for 107 years. Like many of us who have switched careers from a family business Paul found that the industry he was involved with had changed. It was no longer a viable economic option for he and his family. He talked with his mother and came up with a gut wrenching decision…….it was time to sell the business and move on. Paul now has a company called More Clients, More Fun how to use LinkedIn using the Book Yourself Solid System.

We’re going to talk with Paul about what happened since he started his new business and what were the steps that have made him so successful

Here are some of the things you’ll learn in today’s podcast:

Why it’s always important that you follow your passion.

How it feels to be in a startup business

We talk about building private clients

We talk about identifying the best customer

Why values are so important in business

Transcript

Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.

Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh: Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business. Our guest today is what I call a repeat offender which means he’s back for a second bite of the apple. That’ll be Paul McManus. The first time we talked with Paul, he had just left his family business and was starting a new business called More Clients, More Fun. And he has had a ridiculous – I mean a ridiculous amount of success in this business. And I said, “Well, we have to get Paul back to talk about what happened since he started his new business and what were the steps that have made him so successful.” So let’s bring Paul in and we’ll start the conversation around that.

Hey, Paul. How are you today?

Paul: Hey, Josh. I’m doing fantastic. Thank you so much for having me.

Josh: Oh, it’s my pleasure. It’s always fun talking with you.

Hey, so last time we talked, you were telling me about how you were just really glad you managed to leave the family business. You had moved yourself to Houston. You were just getting started and there was a scary startup thing you were in the middle of. How many years has it been now since you did that?

Paul: Let’s see. I think I technically left the family business in July 2014 and I got this business started just about three years ago, so it’s been about three years since I kicked things off, yep.

Josh: Okay, so let’s talk about what’s happened in that last three years. You left the family business. You started this new business. You went through the scariness of startup. And it seems to me like you’re quite a bit past that scary startup phase.

Paul: Yeah, somehow, right?

Yes. You know, so just to recap. To my mind, it’s interesting in the sense that I got started just with a dream and some passion and, you know, 20 bucks – a monthly recurring expense of 20 bucks. I had a $10-MailChimp account, a $10-Zoom account. I got, literally, I want to say “no money in the bank.” I had some credit cards leeway. And so, it was really a matter of sink or swim or burn your ships. I mean, so the choice was to succeed or die, right [laughs]?

Josh: [laughs] And the truth is you are succeeding. So what are you charging a month now?

Paul: I don’t want to scare anybody but I’m what I’m increasingly charging for—or what’s become my real sweet spot, which I’m happy to discuss a little bit more, is now $8000 a month.

Josh: Okay, so you went from basically— when you first doing this, what were you charging a month?

Paul: [laughs] I don’t even know if I want to admit that [laughs].

Josh: Yeah. You do want to admit that because I—

There’s actually a method behind this question because I’m about to get to the thing which I call pricing resistance which I don’t think you’ve hit yet but we’ll talk about that.

Paul: Yeah [laughs].

Josh: So where did you start at?

Paul: So when I started the business, three years ago, my initial thought was to do it purely as a scale business. And what I mean by that is I didn’t want to get into one-on-one coaching or consulting. I wanted to do the whole martinis-on-the-beach dream which is the online training center, passive income. I do a webinar. I don’t speak with anybody in sales but it just all comes in the funnel. The bank goes up. I might appear at a group coaching call. And that’s the extent of that.

And, really, to reveal—to pull the curtain back, if you will, is that that model, did not work for me. I mean, yes, there was a lot of success. Yes, we built a business over the first year or so. We grew 10,000 or more opt-ins to our email list for our webinars. We grew a community in the first couple of years of over 200 clients.

But the pricing model was such that during the first year we kicked this thing off and I think it was at $297 for four weeks. And then, over a course of a year or two, we slowly took the pricing up to a thousand dollars lifetime access. And you can imagine how many people you need to get to say “yes” to be able to not only make enough revenue but then you have partners, you have expenses. And so, the bottom line was that after— you know, I forget how long exactly where it was but a year to a year and a half in, I came to the conclusion that, “This isn’t working. This is not fulfilling my dreams. This is not fulfilling my financial responsibilities.” My family, which had been very supportive was starting to be less so [laughs].

Josh: [laughs] Gee, I’ve never had that happen.

Paul: You know, I was starting not to ask for some handouts, so I went through some dark—no, I want to say, about roughly half, maybe a a year in or a year and a half. Let’s forget the math right now but at some point during that part I came to, “Do I throw in the towel?”

Josh: And you obviously decided “no”.

Paul: Yes [laughs].

Josh: And then you did what we magically call, in the world of innovation, a pivot.

Paul: Yes. Yes, I pivoted. So I reached the conclusion that the whole leverage model— well, it works for some people and it could work in the future for me. In the short term, it wasn’t working so I immediately said, “Okay. Well, I really don’t want to get a job,” right? And so, [laughter] I guess I’ll start—

Josh: Or you don’t want to be an employee because you might not be an employable.

Paul: Yeah. I’m definitely not employable.

Josh: Which is my case, by the way.

Paul: I’m way past being employable. Nobody wants me.

And so, I just made the pivot to start and get private clients. And, for me, that was scary because this whole business model – I was more comfortable with the leveraged one and the group program than I was in the idea of having private clients. I mean, that probably with a lot of people’s work, I guess, most people’s journey, I think, is the opposite. But, you know, I just decided, “Okay. I need to get some private clients.” And luckily the asset that I’ve built up during that first year to a year and a half was this amazing community, was this tribe of people that knew me and everything else. And so, once I decided mentally to make that pivot and take on private clients, very quickly, I was able to start to build my income in a reasonable way.

Josh: So there’s something about building private clients first which, in my opinion, makes a ton of sense. I think what you did is a relatively typical mistake that people who are in the advice business make and that they build programs before they really know what the programs are that they should build. And the way you figure out what programs you should build s by working with private clients.

Paul: Totally.

Josh: So my suspicion is that when you go to the scaling remodel again and I would highly encourage you to do so, it’s going to be with a much better knowledge base than when you did before.

Paul: Yes. And that’s what’s interesting that I found because I’ve studied Michael Port’s Book Yourself Solid so I got the whole idea of target market. And so, during this whole period, my target market was coaches and consultants. It still is. At least, publicly, that’s still my market.

What I discovered early on, once I started taking on private clients, was that— and this is actually a concept out of Mike Michalowicz’ Pumpkin Plan book. And it might seem minor but this was a complete game changer for me. And it’s the idea— he calls it the client assessment chart. But it’s the idea of taking your very best client or clients and duplicating them.

And so, in my case, I assessed all my clients and I’d like to add a couple of other factors, so my revenue, cringe factor – about how fast I’m paid, repeat revenue, communication. Do they give you an opportunity to fix it – opportunity. And I did this. And I discovered that my very best client that really scored A’s across the board was a gentleman named Shane Walls who is a life insurance producer. So not my target market whatsoever, not someone I was looking for, not someone I was aware of, not someone that I marketed to whatsoever but somehow he found me. We developed a private relationship and he became my best client.

And it was about a year ago, where I was reading ThePumpkin Plan and I was thinking about it. “Gee, how do I really grow my business even more so?” because I still wasn’t at the level that I wanted to at that point. And just the idea, as simple as it may sound, is I came across the client assessment chart. I had that insight that my business is to duplicate Shane. It’s not about coaches. It’s not about consultants. It’s not about industry per se. It’s “How do I duplicate Shane across all of those factors?” And once I made that decision that’s where my, relatively speaking, exponential growth started to happen.

Josh: Yeah. I call that “cloning your best customers.”

Paul: Yup.

Josh: And frankly, you know, it’s really not as applicable for you. Although it is applicable for you in the fact that once you figure out who that best costumer is, you have to have fanatical discipline to say “no” to anybody that doesn’t fall into that best costumer world.

Paul: You know, what’s really interesting is that this whole— I’ll describe it as like the very elite level life insurance producers select the top 1% of the [inaudible 00:09:03]. It’s where I got this big [inaudible 00:09:04] that I’ve been developing. And one of the things where I started to do more work with more people like Shane in this industry was that (1) yes, they could pay the revenue that I was asking for. And that was like , you know, “Check, that’s great.” But very quickly, I discovered there’s those other intangibles about values – shared values. You know, why is it that Shane and I have such a good working relationship? And what are those specific intangibles that, to me, are a requirement for me to be able to do my best work?

And so, for example, it came down to my values are fun, freedom and impact. And so, I need– I do my best work with clients that we have a very collaborative relationship with. They trust me. We have fun together. We’re both driven to create awesome results. And as part of that, I’ve become incredibly selective so it’s not just someone that meets the demographic characteristics of someone like Shane. It really has to be someone that on the personality side and emotional side, if you will, really, I see that there’s that ability to collaborate with and replicate those results because at the end of the day if I’m not enjoying the work, I want to do less of it. Whereas, if I’m enjoying the work, I want to do more of it.

Josh: Absolutely.

Actually, I was on Mike Michalowicz’ podcast yesterday, talking about my new book. And this was a topic we got into which was one of the five areas of business sustainability are having clear values.

Paul: Yes.

Josh: And he was saying, “Well, values are great for employees but what’s the big deal about that?” And I said, “No, no, no. You don’t get it. Values are what you use for all the stakeholders in your business, including your customers.”

Paul: Yes.

Josh: You just gave a great story which I’m going to steal, by the way, because I love stealing stories.

Paul: It’s yours. It’s yours.

Josh: And I’m going to use it when I start talking about why values are so important in the business, not just so you get great employees who are all on the same page but you have great customers who are all on the same page. And what you find when you do that is you’re cost of service goes down to about 0 because you’re not reinventing the wheel every time a new client comes into your business. You already know what you need to do – 80% to 90% of all your clients, when you go to that profile, will have the exact same needs.

Paul: I would add to that. And this is I think interesting as well, is that one of the values of an ideal client for me is someone that’s willing to promote me, right? So not only are they a great client, not only do we get along, not only do I do great work for them and they get results. But also, for me, to really say that this is an A level client for me, it’s someone that if I ask for a reference, if I ask them to talk to someone who’s considering my services that they would be a good reference for. And if I involve them in different activities, they immediately say “yes”. It’s like basically, “What do you need? How can I help you?”

Josh: Right, so one of your A customer things that you’re going to be looking for outwardly is what I call “your client needs to be a connector”–

Paul: Yes.

Josh: –because there are people who are great clients but they’re just never going to refer you no matter what you do.

Paul: And not only that but then also, you know, I have other clients who I’m still working with but I can immediately tell that even though I’m getting paid a certain amount that they’re not A level clients in the sense that when I ask them to do something, the answer is, “let me think about it or I want to decline.” This actually happened recently with one of my clients and considering – okay, when we renew, “Do I really want to renew?” Right? Because my sweet spot is building relationships with people that are connectors and that will go do that for me in terms of helping me build my business.

I mean, it’s very synergistic which leads into my ability to– you know, this point towards what I would’ve considered a year ago to be ridiculously high prices. You know, it’s one that’s happening that sweet spot market that can afford it. It’s value-based pricing, meaning that the return on investment that I had helped them create pays for it but a big part of taking a new prospect and helping them make that “leap of faith” that they can also get those results and make that fairly substantial investment is because I have people like Shane that I immediately send up to and say, “Talk to him before you sign up. You know, I want you to make a good decision and you can talk to him or some other of my clients like him. And I want you to be very comfortable with this decision.” And it’s that process that’s allowed me to really price at the high end of the services I offer.

Josh: So you just brought up a really important point which is my point also when I talk to people about hiring me as a one-on-one coach, I charge about $5000 a month which means that if a client’s business is not making $750,000 or more a year, it’s going to be almost impossible for them to write me the check, no matter how much they want to work with me. Someone making $100,000 a year is not going to spend 60% of their earnings on a consultant, or a thinking partner, or whatever you want to call me. And that’s true with you. When you’re working with these life insurance agents, they’re probably in the seven-figure and above commission level a year.

Paul: Yeah. They’re all in the high six-figure to seven-figure levels.

Josh: Right. Otherwise, they may want to hire you. They may see all the value in it. They may see all that stuff. They just can’t write the check.

Paul: Yup, I totally agree.

Josh: So that’s something that’s really important for folks to realize that when you are pricing yourself, you’re not going to get big bucks when you’re working with somebody who makes $50,000 a year.

Paul: Yes. And that’s kind of been part of my own journey because very early on I adopted coaches and consultants as my “target market” for a variety of reasons and they continue to be one of the key groups that I help support but just increasingly, as I go forward, I can see very clearly where my revenue is primarily coming from.

Josh: Right. So with that smaller group and with the group— you know, the coaches and the consultants and those sort of folks, what you need to do is you develop a one-to-many program.

Paul: Yes. Which I have, which is the More Clients More Fun, which is kind of the key thing that I’ve developed over the past couple of years and I continue to have available.

The other offering that I developed about six months ago, and is actually giving me probably the most joy, just from a coach’s standpoint, is the VIP Mastermind. It’s priced where there’s a one-on-one coaching. It’s leveraged. I bring people together in an even more tight-knit community. And we’re actually going to Hawaii next week which will be fun. You are invited, Josh [laughs].

Josh: I was and we won’t get into my reasons why because I’m a whimp but that’s another point. And also, something you have to realize, it’s ski season.

Paul: Okay [laughs].

Josh: If you did this like in April or May, I probably would come [laughs].

Paul: There you go.

So this is probably— you know, because I’m very motivated by making money – which I enjoy. But I’m also motivated by making an impact. And where I probably get most of my joy, just as a coach and as a professional now, is in my VIP Mbecause it’s a little bit more than my much more stable program which is very one to many, and this is kind of a hybrid so it brings in a decent amount of revenue for my time invested. But it’s really just where most of my passion, where most of my fun is and just where I really enjoy making that contribution, seeing people really grow their businesses,

One of the things I’m doing right now, with the people in this program, is really helping them create strategic alliances and really grow their business much more significantly [inaudible 00:16:45]. Today, there are two people in their right now whose names I won’t mention but they both serve attorneys. And so, it’s just– I just saw, with both of them, they both have these skill sets that were so complementary in a similar market and because they were in the same group with me, my VIP Mastermind, I brought them together. And now, seeing what they’re planning on doing, it is just amazing. And so, being able to create that environment is what brings me a lot of joy.

Josh: So I’m going to want to want to continue on this mastermind topic when we go back to Facebook Live only. But we only have a few minutes left for the podcast and I have a question for you which I think is just really important, “How did you know when to raise your prices?”

Paul: Great question.

Josh: And I know this is— yeah, well, this is something which is a hugely big deal because I’m asked, on a regular basis, by folks like you, “How do I price my services?“ And you actually went through a workshop I did on that. But there’s another piece to it which you’re at right now.

Paul: Sure. And for me, the piece where I’m at and part of starting my steady price increase is, I mean, I’m just increasing my prices across the board on a fairly consistent basis is simply supply and demand. So for my program that’s surely group focused, you know, that one we raised to what I think is a relative— is a decent investment but it doesn’t take any additional of my time to manage. So that one’s been steady for a bit now. But when it comes to my private coaching, my VIP mastermind, what I call my elite-level services, those have all gone up significantly in the past year. And the key driver of that’s simply supply and demand of my time.

Josh: So here’s something I want to add to this which might be a useful piece of information. You should always raise your prices when you don’t hear “no” more than 20% of the time. So, in other words, if 20% of the time someone is saying no, your prices are probably about as high as they want to be.

Paul: Yep.

Josh: But if it’s 5% of the time. Or, even worse, never—

Paul: [laughs].

Josh: –people are saying “no” who you want are higher, that’s a clue you’re not expensive enough.

Paul: Yes. I would absolutely agree [laughs].

Josh: And the truth is– and this is true for all businesses, not just the advice business but all businesses, we tend to believe that pricing elasticity, meaning how much we can charge is much, much less than it actually is because we never want to hear “no.” If you’re not hearing every once in a while “You’re too darn expensive for me” then your prices are too cheap.

Paul: I think that’s great advice.

Josh: We have to leave it here for the podcast, so Paul, if somebody wanted to get in touch with you and pay that obscene amount of money—

Paul: [laughs].

Josh: And by the way, it’s not an obscene amount of money because the value, I know, you provide—

Paul: Sure.

Josh: — is unbelievable. But if somebody wants to find out, “Why is this guy worth $8000 a month?” How would they find you to get that question answered?

Paul: Sure. The easiest way to find me is at our website, moreclientsmorefun.com. Otherwise, to look me up on LinkedIn and that’s just Paul G. McManus on LinkedIn.

Josh: Okay, cool.

I also have an offer for you. In fact, I have a couple of offers for you but we’ll just talk about one today. You see this right here?

Paul: I do.

Josh: This is my new book and it’s called Sustainable: A Fable About Creating A Personally and Economically Sustainable Business. You can get it for $15.95 plus shipping and handling at my website. Or you can get it for $15.95 plus shipping and handling at Amazon. There’s a reason you want to get it at my website. If you get it at my website, you get two bonuses with it. One, is a free 20-minute conversation with me and I’ll guarantee that in 20 minutes, whatever we talk about you’re going to hear something that’s unusual, that you’ve probably not heard before. And the second is, I wrote a 35-page how to implement the book.

Now, the book itself, Sustainable, is a fable. It’s a piece of fiction. And after I read these things a lot, I always wonder, “Okay. Great, lots of good information there. How do I it?” Well, I actually wrote an ebook that tells you how to do that. So you get both those bonuses if you get this off my website. And the website that you use to get the book is www.sustainablethebook.com. Now, it’s www.sustainablethebook.com.

This is Josh Patrick. You’re at the Sustainable Business. Thanks a lot for hanging around today. I hope to see you back here really soon.

Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

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About Josh

Why would you want to listen to me?

My specialty is working with owners of private businesses. It’s where I have the most interest and can add the most value. If you own a business and are interested in a coaching relationship as well as mentoring, I’m your guy.
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ABOUT JOSH PATRICK

My main focus in life is helping private business owners create a sustainable business that will last past them. I help create great outcomes using life experiences I’ve had during my almost forty years of running and being around my favorite people, private business owners. I’m a student, an entrepreneur and a curious observer of life. Read More